MIT and the Digital Economy

February 19, 2013

MIT Sloan’s Erik Brynjolfsson discusses the developing digital economy at an event in San Francisco

A new industrial revolution is taking place.

Driven by digital technologies—hardware, software, networks—this revolution will transform our society, businesses, and economy with incomparable speed and force. It will create unprecedented wealth, spark innovation in all sectors, and convert what was once reserved for science fiction into our everyday reality.

Research at MIT and MIT Sloan, and work by industry leaders, including MIT Sloan alumni, is leading the way in this new digital economy. This work was showcased Jan. 18 in San Francisco at MIT and the Digital Economy.

Race Against The Machine

What will the revolution look like? And how will we manage our society and our economy after it happens? MIT Sloan professor Erik Brynjolfsson explains how a growth in wealth and productivity has not been matched by an increase in employment and wages.

Meanwhile, machines and computers can do more and more, and society may benefit as a result, Brynjolfsson believes. In fact, astonishing technology growth could mean new models for productivity and entrepreneurship.

The Coming Industrial Revolution

Former MIT professor Rodney Brooks started both iRobot, the maker of Roomba, and Rethink Robotics, the maker of the new industrial robot Baxter. One of the “institutions of the Institute” (says Andrew McAfee of the MIT Center for Digital Business), Brooks explains how the burgeoning maker movement—a kindred spirit to MIT’s hacking culture—signals big things for U.S. innovation and industry.

“I think there’s three questions to ask to get there,” Brooks says. “What do we still need to invent? What infrastructure do we need to grow? And what new business models need to emerge?”

MIT’s Vision for the Digital Economy

In their work, Brynjolfsson and McAfee see a nearly limitless potential for growth in technology, but they also want to ensure that society and employment accelerate as well.

“Technology is important, but by itself, that’s not enough,” says Brynjolfsson. “You can only get so far by paving the proverbial cow paths … instead, you need to reinvent organization and management to take full advantage of the technology.”

That’s the goal of the Initiative for the Digital Economy—MIT Sloan’s effort to assemble the top minds in technology, economics, public policy, and business to usher in the revolution that benefits everyone.